FTX has announced that it will begin distributing funds to creditors on January 3, 2025, after receiving approval for its Chapter 11 reorganization plan.
The company has spent over two years recovering billions of dollars for its creditors and aims to provide at least 118% of the claim value to 98% of creditors.
The initial distribution will be limited to specific creditor groups, known as "Convenience Classes," and is expected to occur within 60 days of the effective date.
Creditors must complete Know Your Customer (KYC) verification and submit tax forms through the FTX Debtors' Customer Portal to receive their payments.
BitGo and Kraken have been chosen to facilitate the distributions.
The CEO of FTX Debtors, John J. Ray III, expressed pride in the recovery efforts, and it is estimated that $2.4 billion of the recovered funds may be reinvested in the cryptocurrency markets.
Repayments for creditors with approved claims under $50,000 are expected within 60 days, while those with larger claims may have to wait until mid-2025.
However, there are challenges, including a significant portion of claims being purchased by credit funds that are unlikely to reinvest in cryptocurrencies, and a percentage of claims held by sanctioned countries, insiders, or individuals who have not completed KYC verification.
FTX is focused on ensuring that all eligible creditors can navigate the KYC process and choose their preferred distribution platform.
The successful execution of this plan will be closely watched by industry analysts and stakeholders.